Taiwan’s economy grows 3% in 2020 thanks to virus response
Shanghai, China, Jan 30 (efe-epa).- The economy of Taiwan was one of the few in the world to end the first year of the coronavirus pandemic in positive numbers, growing by 2.98 percent over 2020.
This official estimate, published Friday night by the General Directorate of Budget, Accounting and Statistics of the Taiwanese government, marks the first time since 1990 that the GDP of Taiwan has grown at a faster rate than that of China. The government of Beijing recently reported an advance of 2.3 percent for the overall year.
In addition, the data not only shows that the Taiwanese economy remained at the same level of growth as in 2019 but that it is 0.02 points higher than that year, that is, that it grew even more while most world economies are contracting due to the impact of Covid-19.
Much of this success is due to the speed with which Taipei reacted to the pandemic, imposing restrictions on arrivals from China during the first signs of the initial outbreak registered in the Chinese city of Wuhan.
The recovery was especially notable in the second half of the year, since in the third quarter, GDP increased by 3.9 percent year-on-year and in the fourth by 4.9 percent.
In the first, the data had been at 2.5 percent, and in the second, the worst part of 2020 on the island, at 0.35 percent.
Private spending – the main indicator of consumption – fell by 2.36 percent in 2020, while public spending expanded by 2.69 percent, which Lloyd Chan, an economist at Oxford Economics, said helped to “underpin the strong economic upturn.”
Regarding foreign trade, exports – on which the island economy strongly depends – rose by 1.13, percent mainly due to the demand for electronic products such as audiovisual and communication systems, much in demand due to pandemic confinement.
Meanwhile, imports fell 3.76 percent compared to 2019.
The unemployment rate also fell during the second half of the year, ending 2020 at 3.68 percent after having marked its peak for the year in May at 4.07 percent.
“We expect growth to accelerate in 2021 on the back of sustained strength in exports and an improvement in domestic conditions,” said Chan, citing specifically international demand for Taiwanese memory chips for the deployment of 5G networks, and global growth recovery.
With regards to private consumption, the expert believes it will continue to recover gradually as labor market conditions improve and “as vaccination looks likely to start in Q2.”
The Taiwanese government is optimistic about the economic recovery in 2021, as shown by the latest official forecasts, which contemplate a 3.83 percent year-on-year rise in GDP. EFE-EPA